Hey all! I’m Juan Villaverde.
Today, I’m here to address criticisms regarding our ratings methodology.
First off, any and all feedback is welcome! I mean that.
We’re delighted with the tremendous outpouring of commentary about the Weiss Cryptocurrency Ratings: the good, the bad, the ugly. We love it all because, at the core, the passionate debate and controversy reflects our shared vision for cryptocurrencies and blockchains, not only revolutionizing the financial industry, but also changing people’s relationship to money itself.
Never in my lifetime have I seen greater enthusiasm for any investment! No matter how you slice it, that’s a good thing … which leads me to one of the biggest sources of misunderstanding about our ratings:
We do analyze them as INVESTMENTS. In fact, our primary audience is investors. And most of them are new investors coming into this market for the first time.
If you’re among them, you don’t have months – let alone years – of experience with the volatility and periodic price crashes. You don’t have mammoth cryptocurrency profits in the bag to cushion the next big decline. You get scared by 10% down days. You won’t believe me if I tell you “a crash is just temporary.”
That’s the number one source of misunderstanding between our model’s results and the grades that most folks in the cryptocurrency space expected: That big price volatility!
That’s the main reason we have no A’s on our list right now.
It’s also one of the key reasons some currencies seem to be under-rated while some seem over-rated.
It’s why two currencies with very different technology or fundamentals wind up in the same general category. But they’re not the same.
So to provide more clarity, here’s what we’re going to do …
We will break out our assessment of each of the four main factors that go into our final letter grade: Risk, Reward, Technology and Fundamentals.
We will describe our assessment for each as “excellent,” “good,” “fair,” “weak” and “very weak.”
Then we’ll leave it up to each person to decide how to use the info.
If you’re an investor primarily interested in risk/reward, you can look mostly at what our Risk and Reward Indexes have to say.
If you’re primarily focused on technology/fundamentals, no worries! You can look mostly at what our Technology and Fundamental Indexes indicate.
Will this step address all of your questions? Of course not. But it will certainly add more clarity.
I’ve got plenty more comments to respond to, particularly regarding individual coins. But I’ll save them for later, after we give our subscribers our evaluations on each of those four factors that go into our ratings.
Best,
Juan
